Most organizations do not use financial budgeting and planning in their operations. It is a risky way of conducting the organization's functions as it is not easy to track the expenditure. Also, if there is a fraud of losses, the organization's management cannot easily detect such miscellaneous activities. The fact that the organization has not been planning and budgeting for its past funds poses a risk. It will not be easy to gain a competitive advantage over the competitors if they cannot trace their spending. For the ease of management of activities, there is a need to handle the finances effectively. There is a need to have a financial planning and budgeting program to be easy to track on an organization's operations. The program will make it easy to carry out forecasting and develop contingency plans that will effectively mitigate risks both at the moment and in the future.
Methodology
The most effective method to use in the research is to compare organizations' various financial and budgeting programs. The critical contribution of financial planning and budgeting to the organization is to realize its revenue. The organization needs to keep track of the in and out-flow of money. The in-flow will be represented by the profits developed within a specific time, while the company's expenses will represent the out-flow. Therefore, while carrying out the investigation, the strategy will be applicable as it will be easy to know if the entity is running at a loss or profit. The formation will make it easy for the executive team to create policies and contingency plans to prevent the company from running bankrupt.
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The reason for selecting the research is to gather enough information on the various financial planning and budgeting strategies to ensure solvency in a business's daily operation effectively. It will be good if the finance department can be given the mandate to record the expenses and gains in the various books of accounts such as balance sheets in the research. Sustainability in the company can only occur if there are adequate planning and budgeting. Keeping records will play a significant role in the detection of fraud. After a particular time, the company's auditor can go through the various accounts of accounts to ensure everything is in order.
Solution
A critical change that needs to be made on the original program is the planning and implementation. While doing the planning, some steps need to be followed. The first step is to identify the operation in the company. The processes are in terms of the expenses that the company will encounter. All the procedures should be listed down in a list, and the overall amount that needs to be allocated should be determined. Priority should be given to each of the operations, starting from the most important to the least. The allocation of funds should be done based on preference. The team involved in the budgeting should be aware that the amounts are just approximations, and they are prone to changes. Thus, there should always be a surplus set aside in the budgeting and planning process for any operation that might fall short of funds. Also, those activities will not consume the entire amount, and it should be recorded down. Making the change is because it will be necessary to approximate what was spent in the last budgeting and make a reasonable estimation in the new plan. The planning and budgeting process's effectiveness largely depends on the team's point. There is a need to have a communication channel that will ensure a free flow of information.
